Problem 23-2B Scrap or rework p2 Micron Manufacturing produces telescopes. This month it produced 50 telescopes at a cost of $9,000. These telescopes were damaged in storage. Management has identified three alternatives for these telescopes.
1. They can be sold as scrap to a wholesaler for $3,750.
2. They can be disassembled at a cost of $2,000 and the parts sold to a recycler for $6,500
3. They can be reworked and turned into good units. The cost of reworking the units will be $3,600, after which the units can be sold for $25,000 Required:
(1) Compute the income for each alternative. (2) Which alternative should management select?
